Tuesday, August 19, 2014

Singaporeans lost money in another bogus investment opportunity

According to the Channel News Asia, up to 1,500 investors in Singapore could lose a staggering $70 million after Brazil Embassy denied that property firm EcoHouse Group has any links with the Brazilian government. Apparently, EcoHouse had claimed to be working with the Brazilian government on a social programme and even promised fixed return of 20 per cent for a one-year investment contract. However, EcoHouse abruptly shut down its Suntec offices and many investors complained that they have not gotten their returns despite maturity of their contracts. In addition, some investors have begun legal actions against the company and the Monetary Authority of Singapore (MAS) had placed the company on the Investor Alert List.

Whenever I come across such articles, I feel sad for fellow Singaporeans. This is not the first time that Singaporeans fell prey to a money scam. A few years ago, many Singaporeans also lost millions of dollars in several elaborated gold buy-back scams. Indeed, many Singaporeans hope to make their money work hard for them but ironically ended up losing all their hard-earned money in bogus investment projects. Their greed and ignorance prevail whenever they were told that there are better ways to make money than putting their savings in the banks. In their heads, it never cross their minds the kind of risks involved in such projects. 20 per cent return is an incredible yield and investors should already be on their guard whenever they were offered such investment products. Yet, they chose to ignore the warning signs and now they tried to claw back their monies through legal help and enforcement actions from the authorities.


 

My opinion is that these investors are not going to get back a single cent of their money and this fiasco is going to be another sobering investment lesson for them. The hard truth is, most Singaporeans really don't know how to invest and the worst thing is that they can't handle this truth. Last month, in my article, I touched on this issue after one of my readers commented that Singaporeans are intelligent. I pointed out that actually many Singaporeans choose to indulge in self-glorification and refuse to accept the hard truth that we are not genetically engineered to be money smart. Many Singaporeans were victims of bogus investment schemes because they don't know how swindlers work.

There will always be new scams or bogus investment schemes devised to make investors part away their money. So, to be rich and successful in Singapore, you must first know how to protect your assets. There is no point in establishing a successful career or having multiple income sources but end up losing your wealth to fraudsters. Below are some tips from MoneySense on how to protect yourself against money scams:

1)  Do not believe in sales pitch that promise super high returns. If something is too good to be true, then it is.

2)  High pressure tactics such as "once in a lifetime" or "limited time offer" are common ruses used by sales representatives to  tempt you. Always be skeptical and tell yourself that there are no such things as "free lunch" or "easy money". There are only stupid people easy to cheat.

3) Check whether the company is regulated. If the company is based in Singapore, you may conduct the following simple checks:
This is a list of financial institutions regulated by the MAS to operate in Singapore. After you have found the entity in the Directory, be sure to note what activities it is authorised to conduct in Singapore. 
This is a list of unregulated persons who, based on information received by MAS, may have been wrongly perceived as being licensed or authorised by MAS. The list is not exhaustive and will be updated.
This is a list of representatives providing financial advisory or capital markets services under the Financial Advisers Act (FAA) and the Securities and Futures Act (SFA).
Always remember: perception is real and perception is what you perceive reality is. The reality is that there will always be Singaporeans who fell prey to these bogus investment schemes. If you think that you are too smart to be cheated, then good luck in your financial journey.

Magically yours,
SG Wealth Builder

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